ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Definition: Capital gain is the profit one earns on the sale of an asset like stocks, bonds or real estate. It results in capital gain when the selling price of an asset exceeds its purchase price. It is the difference between the selling price (higher) and cost price (lower) of the asset.

Detailed explanation-2: -Capital gains are profits on an investment. When you sell investments at a higher price than what you paid for them, the capital gains are “realized” and you’ll owe taxes on the amount of the profit.

Detailed explanation-3: -A capital gain is the increase in a capital asset’s value and is realized when the asset is sold. Capital gains apply to any type of asset, including investments and those purchased for personal use. The gain may be short-term (one year or less) or long-term (more than one year) and must be claimed on income taxes.

Detailed explanation-4: -Capital gains and deductible capital losses are reported on Form 1040, Schedule D, Capital Gains and Losses, and then transferred to line 13 of Form 1040, U.S. Individual Income Tax Return.

Detailed explanation-5: -Capital gains, dividends, and interest income Most investment income is taxable. But your exact tax rate will depend on several factors, including your tax bracket, the type of investment, and (with capital assets, like stocks or property) how long you own them before selling.